LONG BEACH, California (Reuters) - Two of the nation's biggest power companies are teaming up with a solar start-up to create one of the world's largest solar power projects, which they say could make electricity at a competitive price.

PG&E Corp, FPL Corp and solar thermal power generator Ausra Inc unveiled plans on Thursday for utility-scale solar plants which they claim will produce electricity at a price comparable with conventional fossil-fuel power plants.

The announcement represents the commitment among the three companies to build 2,000 megawatts of solar thermal plants in several states, starting in California where PG&E is based, and Florida, where FPL has its headquarters. It was made at the Clinton Global Initiative in New York, former President Bill Clinton's annual philanthropic meeting.

The overall project of at least $5 billion will be able to generate enough power for almost 1 million homes.

ADVERTISEMENT

Developing large-scale thermal solar power plants is seen as a major step in cutting costs for renewable power and making it an economically viable alternative to coal-fired power, even without government subsidies.

A document issued by the Clinton Global Initiative shows that solar thermal advocates think they are ready to revolutionize electrical power production.

"Ausra recently published a major study ... which shows that solar thermal generation can deliver over 90 percent of all U.S. electric power, at prices directly competitive with (or cheaper than) coal-fired generation," the document said.

Coal-fired plants generate half of U.S. electricity but are also a major cause of carbon dioxide emissions, the main greenhouse gas.

The 2,000 MW of power will produce virtually no carbon emissions and represent more power than all the photovoltaic solar panels installed in the world last year, according to Ausra's vice president, John O'Donnell.

The plants will provide utility-grade power to the power grid, O'Donnell said.

"These power plants will provide validation to the wider world electric market that a transition to zero-carbon electric power generation can be made without massive subsidies or negative impacts on economies," the Clinton Global Initiative document said.

Ausra -- a private company based in Palo Alto, California, which is funded by venture capitalists Vinod Khosla and Kleiner Perkins Caufield & Byers -- is among a handful of companies seeking to build large-scale projects by using "concentrated solar power."

LIGHT HEATS WATER TO STEAM

Solar thermal differs from photovoltaic panels that make power directly. Ausra uses acres of mirrors it places near the ground to focus reflected sunlight on a long tube 8 feet above the mirrors. The tube carries water that becomes steam to turn turbines like those used in conventional power plants.

Using tanks to store heated water and steam, thermal plants can keep running at night.

The first plant in California is to be a 175-MW project in the central part of the state.

FPL on Wednesday said it has committed to Ausra building a 300-MW plant at a yet-to-be-announced site in Florida and another 200-MW plant elsewhere, likely in California.

FPL said it will spend $1.5 billion building solar thermal plants in Florida, California or other states as part of a $2.4 billion program aimed at cutting carbon dioxide emissions.

PG&E has committed to 1,000 MW of the solar thermal plants from Ausra over the next five years. Estimated cost to build the plants is $3 billion, and about $1 billion to operate them. The plants are designed to last at least 30 years.

Earlier this year, PG&E Chief Executive Peter Darbee told Reuters that cutting greenhouse gases will take more effort than it took to land a human on the moon.